University of Southern California

American Corporate Governance and Children: Investing in Our Future Human Capital During Turbulent Times

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Article by Marleen O’Connor-Felman
From Volume 77, Number 6 (September, 2004)

The goal of this Article is to establish a new area of research exploring the connection between corporate governance and the well-being of children. Admittedly, at first glance, the relationship between the hard-nosed world of corporate law and the welfare of our nation’s most vulnerable citizens is far from obvious. We must step back to see the bigger picture – using the knowledge that we are at a historical transition from an industrial society to a knowledge-based economy. With this wide-angled lens, we can see connections among our most basic institutions of family, work, and corporation. Specifically, each institution is simultaneously in the midst of dramatic social and economic turmoil. Yet, these disruptions are not isolated events. Rather, crucial patterns of relationships emerge across time and among nations.

To explore how the transformations in family, work, and corporation are interwoven, we must start with the premise that human capital is the crucial factor for this nation’s success in the new economy. Even for low-level jobs, the so-called knowledge worker needs math and computer literacy to problem solve and cooperate in teams. The United States has experienced remarkable economic prosperity in the past decade, but when we look into the future, a different picture begins to surface. Compared to other advanced economies, the skill proficiency of our youngest generation of workers is lacking. Given this skills deficit, a wide variety of policymakers have begun to consider the topic of human capital formation. A general consensus exists that there is a danger that America’s children will be unable to meet the needs of tomorrow’s flexible labor markets.

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